Canada as a Principal Economy: A Comparative Critique of the ‘Counter-Discourse’ of Political Economy

A tremendous revival of Canadian political economy occurred in the late 1960s and early 1970s. “Left-nationalist” dependency theorists, in their analyses displayed a greater depth, breadth and coherence of analysis than any other approach to Canadian political economy. It would not be too much to claim that in the 1970s, the main creative source for the study of the Canadian economy came from the left, a left informed by the nationalist dependency school framework. This is no longer the case. In the 1980s, the momentum in scholarly research has definitively swung away from left-political economy toward what might be characterized as "liberal continentalism". Its main tenets are outlined in detail in the multi-volumed background studies and Report of the Royal Commission on the Economic Union and Development Prospects for Canada (Macdonald Report) It is grossly unfair to attempt to summarize the central thrust of such an undertaking in a paragraph, but suffice it to say that it cuts in exactly the opposite direction of the left-nationalism of the 1970s. Canada is not portrayed as a semi-colonial dependency of the American empire, but as a middling size economic power in its own right, capable of competing on the world market. The report's prescription is not protection for Canadian industry through nationalizations and protectionism, but rather exposing Canadian industry to American competition through lowered trade barriers and lessened state intervention. Now while all of the political economists of the left disagree with these prescriptions, and while many no longer adhere explicitly to the central precepts of left-nationalism, it is extremely interesting that to date, the most significant left response to this manifesto of liberal continentalism has come from writers very much in the mainstream of 1970s left-nationalism. The Other Macdonald Report (Other Report) does not call itself "left-nationalist". The term it uses is "counter-discourse of political economy". But Left-nationalist it certainly is. The argument of this paper is two-fold. First, that left political economy must respond to the arguments of the Macdonald Report, attempt to take the momentum away from liberal political economy and put the wind back in the sails of the left. But to do this, the left must break decisively with the nationalist, dependency framework developed in the 1970s. It is wrong prescriptively, analytically and empirically. Clinging to it makes the arguments of the left unpersuasive. This paper will not examine the theoretical underpinnings which have led the left-nationalists into their current dead-end. Rather it will muster the empirical evidence to show the failure of left-nationalism's predictions concerning the trajectory of Canadian economic development. It will do this through an examination of the key assumptions and claims of the Other Report. This is the necessary initial spadework in preparing the ground for future theoretical and analytical research.